Indonesia Political Risk Analyst

Kevin O’Rourke

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

Tax changes mark a fundamental overhaul of auto-sector regulation, designed to move from taxing based on model and engine size to rates based on emissions and fuel consumption.  Pollution in the capital is placing the governor under pressure, but the scrutiny will affect industries more broadly.  A Labor Ministry source downplayed prospects for a Labor Law revision prior to next year.  Widodo reiterated that numerous seats will go to parties -- even as two ministries headed by party representatives face KPK allegations of graft in import quotas, resulting in the arrest of a PDI-P parliamentarian.  Megawati received a fifth five-year term as PDI-P chair in a congress attended by Prabowo.  Haze is returning.  Plus, a close look at the factors causing the 6-30 blackout that covered Jakarta, Banten and West Java.

Tax changes mark a fundamental overhaul of auto-sector regulation, designed to move from taxing based on model and engine size to rates based on emissions and fuel consumption.  Pollution in the capital is placing the governor under pressure, but the scrutiny will affect industries more broadly.  A Labor Ministry source downplayed prospects for a Labor Law revision prior to next year.  Widodo reiterated that numerous seats will go to parties -- even as two ministries headed by party representatives face KPK allegations of graft in import quotas, resulting in the arrest of a PDI-P parliamentarian.  Megawati received a fifth five-year term as PDI-P chair in a congress attended by Prabowo.  Haze is returning.  Plus, a close look at the factors causing the 6-30 blackout that covered Jakarta, Banten and West Java. 

EV, Hybrid Incentives / Jkt's Air / Seats Promised for Parties / Islamists Slammed / Haze Redux

GDP growth was 5.05 percent yoy in 2Q19, with low fixed-capital formation offsetting reasonably strong household consumption.  Prospects exist for a slight pickup in the second half.  Separately, investment data shows another FDI drop (by 2% yoy) in 2Q, but FDI from China surged.  A continuation of that trend could boost macro indicators in future, albeit with questionable ancillary benefits.  The EU plans added tariffs soon of 8-18% on biodiesel, citing subsidization of Indonesian producers.  Pertamina's Java Sea oil spill has caused beach closures while PLN plunged half of Java into darkness for many hours on 4 August -- which heightens the likelihood of State Enterprise Minister Rini Soemarno losing her post in the new cabinet due in October.  The president reputedly favors conferring the strategic agriculture portfolio on a loyalist of Gerindra Chair Prabowo Subianto, the parliamentarian Edhy Prabowo; this highlights risks of yet another poor cabinet, perpetuating erratic policymaking.  The Meikarta case continues to develop, marching closer to implicating Lippo owner James Riady. Politics: Advisors to the president appear to favor the provision of at least one cabinet portfolio to Prabowo Subianto’s Gerindra Party.  The president reputedly favors a Gerindra vice party chair, Edhy Prabowo, for agriculture minister, although some parties in the president’s alliance will object (p. 3).  The well-funded Parliament Speaker Bambang Soesatyo is causing Industry Minister Airlangga Hartarto to scramble for support in preparation for the Golkar’s party‑chair election (Page 2).  The president faces pressure to confer the post of attorney general in his next cabinet on a non-partisan figure.  But the larger issue is finding a champion of reform (p. 4).  The finance minister called on the Bakrie Group subsidiary Lapindo to settle its debts from the 2006 Sidoarjo mud extrusion (p. 4).Security: Authorization to re‑form a joint special forces command for counter-terror work marks another accretion of influence for the military under President Widodo (p. 5).Justice: West Java’s top civil servant, and the former head of a major Lippo Group entity, became the two latest suspects in the gradually unfolding Meikarta property project bribery case (p. 6).  Trade Minister Enggartiasto Lukita has managed to avoid three summons for questioning by the KPK (p. 7).Policy News: The coordinating economics minister aims to certify all smallholder producers of crude palm oil as sustainable by end-2020 – even though the certifications fall short of EU standards for garnering renewable fuel incentives for biodiesel (p. 8). <table class="table table-striped"><tbody><tr><td>Produced since 2003, the Reformasi Weekly Review provides timely, relevant and independent analysis on Indonesian political and policy news.  The writer is Kevin O’Rourke, author of the book Reformasi.  For subscription info please contact: &lt;kevin.orourke@reformasi.info&gt;.</td></tr></tbody></table>Economics: 2Q19 GDP growth was 5.05% yoy, with private household consumption growing by 5.1% (p. 9).  Foreign Direct Investment (FDI) slumped by two percent year on year in the second quarter, although FDI from China increased (p. 9).  Unrelated to sustainability, the EU plans to place countervailing tariffs of 8‑18 percent on Indonesian biodiesel (p. 11).Disasters: Peat‑and‑brush fires are again causing haze in six provinces (p. 12).  Pertamina’s Java Sea blowout has caused the closure of seven recreational beaches in Bekasi and Karawang Districts (p. 12).  Volcanic activity has increased sharply in several locations, including a small eruption from Tangkuban Parahu within metropolitan Bandung (p. 12).  PLN suffered a trip in its Suralaya power plant, happening at the same time as malfunctions in a Cilegon plant -- together, the two events on 4 August triggered a transmissions failure that cut off power to most of western Java, including the entire Jakarta metropolitan region.  After more than six hours, power began to return to some areas around dusk, gradually expanding through the night. Jakarta: Issues of air quality and solid waste are focusing scrutiny on Governor Baswedan, including from Widodo (p. 14).

GDP growth was 5.05 percent yoy in 2Q19, with low fixed-capital formation offsetting reasonably strong household consumption.  Prospects exist for a slight pickup in the second half.  Separately, investment data shows another FDI drop (by 2% yoy) in 2Q, but FDI from China surged.  A continuation of that trend could boost macro indicators in future, albeit with questionable ancillary benefits.  The EU plans added tariffs soon of 8-18% on biodiesel, citing subsidization of Indonesian producers.  Pertamina's Java Sea oil spill has caused beach closures while PLN plunged half of Java into darkness for many hours on 4 August -- which heightens the likelihood of State Enterprise Minister Rini Soemarno losing her post in the new cabinet due in October.  The president reputedly favors conferring the strategic agriculture portfolio on a loyalist of Gerindra Chair Prabowo Subianto, the parliamentarian Edhy Prabowo; this highlights risks of yet another poor cabinet, perpetuating erratic policymaking.  The Meikarta case continues to develop, marching closer to implicating Lippo owner James Riady. Politics: Advisors to the president appear to favor the provision of at least one cabinet portfolio to Prabowo Subianto’s Gerindra Party.  The president reputedly favors a Gerindra vice party chair, Edhy Prabowo, for agriculture minister, although some parties in the president’s alliance will object (p. 3).  The well-funded Parliament Speaker Bambang Soesatyo is causing Industry Minister Airlangga Hartarto to scramble for support in preparation for the Golkar’s party‑chair election (Page 2).  The president faces pressure to confer the post of attorney general in his next cabinet on a non-partisan figure.  But the larger issue is finding a champion of reform (p. 4).  The finance minister called on the Bakrie Group subsidiary Lapindo to settle its debts from the 2006 Sidoarjo mud extrusion (p. 4).Security: Authorization to re‑form a joint special forces command for counter-terror work marks another accretion of influence for the military under President Widodo (p. 5).Justice: West Java’s top civil servant, and the former head of a major Lippo Group entity, became the two latest suspects in the gradually unfolding Meikarta property project bribery case (p. 6).  Trade Minister Enggartiasto Lukita has managed to avoid three summons for questioning by the KPK (p. 7).Policy News: The coordinating economics minister aims to certify all smallholder producers of crude palm oil as sustainable by end-2020 – even though the certifications fall short of EU standards for garnering renewable fuel incentives for biodiesel (p. 8). Produced since 2003, the Reformasi Weekly Review provides timely, relevant and independent analysis on Indonesian political and policy news.  The writer is Kevin O’Rourke, author of the book Reformasi.  For subscription info please contact: &lt;kevin.orourke@reformasi.info&gt;.Economics: 2Q19 GDP growth was 5.05% yoy, with private household consumption growing by 5.1% (p. 9).  Foreign Direct Investment (FDI) slumped by two percent year on year in the second quarter, although FDI from China increased (p. 9).  Unrelated to sustainability, the EU plans to place countervailing tariffs of 8‑18 percent on Indonesian biodiesel (p. 11).Disasters: Peat‑and‑brush fires are again causing haze in six provinces (p. 12).  Pertamina’s Java Sea blowout has caused the closure of seven recreational beaches in Bekasi and Karawang Districts (p. 12).  Volcanic activity has increased sharply in several locations, including a small eruption from Tangkuban Parahu within metropolitan Bandung (p. 12).  PLN suffered a trip in its Suralaya power plant, happening at the same time as malfunctions in a Cilegon plant -- together, the two events on 4 August triggered a transmissions failure that cut off power to most of western Java, including the entire Jakarta metropolitan region.  After more than six hours, power began to return to some areas around dusk, gradually expanding through the night. Jakarta: Issues of air quality and solid waste are focusing scrutiny on Governor Baswedan, including from Widodo (p. 14).

China FDI Surges / 2Q GDP Coasts / EU Plans New CPO Hurdle / Oil Spill, Blackout = SOE[rry] Tale

Indonesia

Wilmar Cahaya Indonesia Tbk PT trades, imports, and exports food, and processes palm kernel oils, palm oils, and illipe butter to produce cocoa butter substitute. Its subsidiary processes cocoa beans to produce cocoa powder and cocoa butter.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Wilmar Cahaya Indonesia Tbk (CEKA IJ)

EV, Hybrid Incentives / Jkt's Air / Seats Promised for Parties / Islamists Slammed / Haze Redux

Tax changes mark a fundamental overhaul of auto-sector regulation, designed to move from taxing based on model and engine size to rates based on...

Kevin O’Rourke

China FDI Surges / 2Q GDP Coasts / EU Plans New CPO Hurdle / Oil Spill, Blackout = SOE[rry] Tale

GDP growth was 5.05 percent yoy in 2Q19, with low fixed-capital formation offsetting reasonably strong household consumption. Prospects exist for...

Kevin O’Rourke

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)